Trump was probably just trying to reveal a little perceived financial acumen. When interest rates rise, bonds become cheap. Since the government has an effective perpetual lock on how low the floor is on the money supply and an explicit perpetual lock on how much of the real value of that money supply that accrues to itself, it can make good on those bonds for less than it sold them for. Instead of taking money from taxpayers, it's taking money from investors. It's all smoke and mirrors since the currency is fundamentally unsound, based on nothing but word of the federal government itself.

That said, there are three ways the US federal debt resolves:

1) A massive increase in the money supply and corresponding severe inflation, 2) default, or
3) some sort of advance comparable to the industrial revolution or maybe scalable nuclear fusion that supply-sides us out of the massive hole the US has dug itself into (tinkering with marginal tax rates is not going to do it--this requires a revolutionary technological advance).

It will never be paid off otherwise. The Keynesians and the monetarists have no more arrows left in their quivers. They're to the point now of talking about negative interest rates. We've had almost a decade of rates approaching zero while simultaneously seeing real per capita growth, well, approaching zero as well. There's no way out.

We're on top of another bubble. Student loans are my best bet for the primary way it expresses itself, with another housing bubble as the next most likely trigger. It may be a combination of the two or something else altogether but it's not a question of if, it's a question of when. Another deep down turn is coming, and the "recovery" we've seen over the last eight years has been so anemic that it feels disingenuous to even refer to it as such. We're going to be stuck in this bumpy, secular decline until something major gives.

Option #1, government-induced hyperinflation, is massive theft from the collective productive class in America. This is the most likely way it resolves. It's why we don't have a mortgage (if nothing else, we'll have the house and the land it's on), a large chunk of savings in gold (and varied other tangibles like the power nine), the rest in stocks (which are inflation-resistant if not inflation proof), and virtually nothing in cash or cash equivalents.

I prefer #2, the Rothbard option, default. It's the ultimate America-First answer. For all other non-governmental or government-backed investment options, creditors take a real risk in lending for a return. If the debtor can't pay, the creditor takes a haircut. The creditor has legal recourse depending on the situation, but best case scenario he gets less than his principal, often substantially less, as in pennies on the dollar. For those who foolishly assumed the debt of the US federal government was a safe place to plant their assets, they'll have a rude awakening.

The sovereign wealth funds and the big foreign government buyers of US debt can go to hell. The drug dealer, China, wanted to keep lending to the drug addict, the US, so the addict could keep buying opiates--the stuff that makes up our half-trillion dollar annual trade deficit with China--from the dealer, and now the addict is kicking the habit and refusing to pay because he can't pay. Too bad, dealer. You should've seen what a bad investment this was. There's no squeezing blood from a stone, and the addict can still kick your ass in a fight so you just lose, hard, on this deal, dealer.

It's a reset button, it'll cause a lot of immediate economic turmoil, but what rises out of the ashes will be a saner, more sober global financial system that ideally won't be based on absurd fractional reserve banking, massive debt leveraging, and perpetual debt servicing.

Saturday, May 28, 2016

Sanders needs the debate far more than he does, so he has enormous leverage. Vet the questions ahead of time, format it in the usual forum style where the actual direct interaction between the participants is minimized, emphasize things he and Sanders have common ground on, like trade and--before Hillary forced Sanders to shift leftward in primaries--gun rights and immigration skepticism, be disciplined enough not to launch a verbal kill shot at Sanders, and otherwise use it as an extemporaneous stump speech opportunity where he is at his best.

The downside risk is easily mitigated. With his charisma and frame control he's masterful at avoiding the body blow. This isn't even a debate he wants to decisively 'win'. The overarching objective is to prop Sanders up to make Hillary's nomination as unsatisfying to Sanders' supporters as possible.

Lock Hillary out of a debate with the largest audience in American history--her elective absence being something both he and Sanders could allude to in their opening remarks. Endear himself as much as possible to disaffected Sanders' supporters with an eye towards the general election. Accentuate Hillary's ire towards Sanders to diminish the salience and status of the position Sanders is offered in a Hillary administration as much as possible. Sanders as Hillary's VP is the worst case scenario and anything that makes that outcome less likely is worthwhile. Get Hillary to offer him something lame like housing secretary instead.

That said, net-net he still benefits from having created this speculation before reneging. The expectations for Hillary to debate Sanders again are obviously higher than for him to have done so. Everyone looks apprehensive about going one-on-one with Sanders, and an enhancement in Sanders' image hurts Hillary, with anything hurting Hillary helping him. Sanders ends up garnering more attention over the course of the week than Hillary does. He avoids the potential debate ambuscade.

Wednesday, May 25, 2016

The following table shows the change in the number of white votes Hillary Clinton received in the 2016 Democrat primaries and caucuses compared to the 2008 Democrat primaries and caucuses for states where exit polling was conducting in both years (with the exception of Iowa, whose entrance polls in '08 didn't record respondent race):

State

%chng

West Virginia

-75.9

Vermont

-65.4

Mississippi

-51.4

Oklahoma

-42.0

Indiana

-36.9

Arkansas

-34.3

Pennsylvania

-31.2

North Carolina

-29.5

New York

-28.6

Florida

-27.3

Alabama

-25.5

Missouri

-25.2

Michigan

-24.4

Tennessee

-20.0

Ohio

-19.4

Maryland

-18.9

Nevada

-18.0

Massachusetts

-15.5

Wisconsin

-15.2

Connecticut

-11.6

New Hampshire

-7.1

Georgia

-3.3

Texas

-3.1

Illinois

+4.2

South Carolina

+22.1

Virginia

+25.3

Through these 26 states, Hillary has received 2.14 million fewer white votes in '16 than she did in '08. She's down in 23 states and up in just three.

Of those three, South Carolina and Illinois have easy explanations. In '08 North Carolina senator John Edwards won a plurality of the white vote. The primary occurred when there were still three electorally serious candidates in the race.

Obama had home field advantage in Illinois in '08. Even so, Hillary's white vote increase in '16 was still quite modest.

Virginia is the only state she convincingly improved her white support in from '08 to '16. Lots of federal government trough-feeding (defense) industries and contractors in the state who were afraid Sanders would cut their allotments?

From her failed run in '08 Hillary learned that winning white Democrats over doesn't matter. White Democrats won't convincingly support a candidate blacks don't. Blacks, in contrast, are monolithic and all vote for the same person. Ergo, white voters can go to hell, both in the primaries and in the general election.

This election is shaping up to be one of the most lopsided in history among whites. Given that Trump will need nearly two-thirds of the white vote to win, it can't be lopsided enough.

The lead is razor thin and well within the margin of error. But it's only May. Trump's numbers are all moving up. Meanwhile, Hillary has been bumping along horizontally and she has so many as-of-yet unexploited vulnerabilities that it's hard to see much of a way for her to ascend. Polls of "likely voters" are, other things equal, superior to those of "registered voters", and Trump's lead is largest in the only "likely voters" poll included in the average. Trump unofficially ended the Republican primaries substantially outperforming his polling numbers. Hillary can't keep pace (see Oregon, for example).

The Clintons are in trouble.

Parenthetically, picking Sanders as vice president would probably reset the general election match up to a month ago when Hillary averaged a 5-10 point lead. Besides the bad blood between Sanders and the Democrat party machine, this would of course mean a white-white Democrat ticket. I won't be alone in the schadenfreude I'll enjoy if we get to see that straining the precarious unity of the Coalition of the Fringes.

* Silver, who claims the biggest mistake he made in the Republican primary process was acting like a pundit and failing to create a quantitative model to support his predictions and here he is repeating the same allegedly flawed process for the general election. It wasn't the lack of a formalized model per se, though, that caused him to miss so spectacularly, it was his failure to look at the most relevant indicators that did.

Nate Silver is tormented by Trump's success. He's offered multiple kinda-sorta explanations and excuses as to why he so wildly and spectacularly missed the mark on Trump before, but a couple of days ago he let loose with a massive post that is still, well, a kinda-sorta explanation on why he was so wrong. Here's a taste:

With some time to reflect on the problem, I also wonder if there’s been too much #datajournalist self-flagellation. Trump is one of the most astonishing stories in American political history. If you really expected the Republican front-runner to be bragging about the size of his anatomy in a debate, or to be spending his first week as the presumptive nominee feuding with the Republican speaker of the House and embroiled in a controversy over a tweet about a taco salad, then more power to you.

Unlike virtually every other forecast we publish at FiveThirtyEight — including the primary and caucus projections I just mentioned — our early estimates of Trump’s chances weren’t based on a statistical model. Instead, they were what we “subjective odds” — which is to say, educated guesses. In other words, we were basically acting like pundits, but attaching numbers to our estimates.

The numbers he attached were things like the quantity of political endorsements received; comparing Trump's poll numbers with those of other exciting early leaders who subsequently flamed out like Herman Cain, Newt Gingrich, and Rudy Giuliani; favorability ratings (Trump's were low while primary success putatively required them to be high), etc. In other words, quantitative stuff.

He says this wasn't formulated into any specific model like his polling predictions--which only differs from what Real Clear Politics does by assigning different weights to different polls instead of RCP's binary yes/no on whether or not to include a poll--the results of Silver's forecasts and RCP's are, not surprisingly, virtually identical. That's likely technically true, but based on the fact that all of these quantitative indicators suggested Trump wouldn't get the nomination, amalgamating them into a formula would have clearly yielded the following prediction: Trump will not win the Republican nomination.

Trump is going to win that nomination, of course. Silver didn't get it wrong because he wasn't meticulous enough with the way he balanced his numbers, he was wrong because he was looking at the wrong numbers, at least this time. Political forecasting is more marketing research than it is Science!--the need to adjust inputs and calibrate assumptions accordingly is a prerequisite to having a shot at getting it right every time rather than only getting it right when everything plays out exactly like it did the time before.

- Immigration. Polls appear to show wide variation in public sentiment on the issue according to how the questions are presented, but the most objectively-worded polls have shown for decades now that immigration restriction and deportation are majority positions at the national level, and are overwhelmingly so among Republicans.

Trump made this his signature issue. With the exception of Tom Tancredo, who was at the time an unknown congressman from Colorado who lacked charisma, stature, and salience, no other presidential candidate since Pat Buchanan has paid it any heed.

Sanders is campaigning on substantive policy positions, and Trump is largely campaigning on the force of his personality. I'm not sure this assertion requires a lot of proof, but if you need some, check out the candidates' websites. Sanders's lists dozens of specific policy proposals across a wide range of issues; Trump's details his position on just one, immigration.

Indeed.

- Relatedly, I'll echo Steve Sailer and note that the success of "far right" European political parties, for which Trump is a closer American representative of than any of the other GOP presidential candidates are, should've tipped Silver off to the fact that immigration (and related issues like internationalism) was going to be a driving factor this time around.

- Nowhere in Silver's 5,000+ word post did he mention social media. Trump dominated the rest of the field, Republican and Democrat, when it came to generating interest on social media. Back in December, I quantified it graphically:

Months before any actual voting had taken place, Trump and Clinton had garnered the most followers. Several months of voting having now occurred, it is clear that Trump and Clinton are going to win their parties' respective nominations.

To emphasize how crucial this has become, consider that Trump is instantaneously able to communicate directly to more people than the audiences at any given time of Fox News, CNN, and MSNBC combined. I hear about every news item Trump's involved in from Trump before I hear about it anywhere else. By leveraging social media, he is able to assert more control over the narrative than the major media do.

- Nor did Silver mention rally/speech turnouts. When one guy is struggling to fill a high school gymnasium and the other guy is packing sports stadiums, it's probably time to reconsider favoring the former over the latter. If, on two-day notice, they'll skip work to travel a couple hours across state to wait a few more hours in line for a shot* at seeing a candidate speak, there's a reasonable chance they're going to drive a couple blocks to the local church or middle school on primary day and spend a couple of minutes voting for that candidate.

* Many people who've shown up for Trump rallies have been turned away because the massive venues were full; my wife and I got to the rally in KC a couple of hours before it started and would not have been able to get in had a friend not arrived two hours before us and saved us a spot in line.

I wonder if Bill even wants Hillary to get the nomination. It's not going to do his reputation any good. Most people under the age of 40 are not acquainted with the myriad ways Bill abused his power to satisfy his unrelentingly rapacious desires. Trump, Roger Stone, and many, many others will ensure that changes over the coming months.

Appalachia is among the most favorable regions in the country for Trump, and many of these people were Trump supporters who, safe in the knowledge that Trump had the nomination locked up, decided to use their votes to sow discord in the Democrat party, but a not insignificant number of legitimately disaffected Sanders supporters will end up backing Trump in November.

Trump perspicaciously realizes as much. I've showcased some of that previously, but it's no one-and-done theme for the god emperor. Today he offered this:

In this environment, it's hard to see how the public perception of Hillary improves. Her favorability numbers are bumping along horizontally, no higher today than they were a month ago. Here they are, among likely general election voters:

Again, at this point most general election voters are not engaged in nomination processes of either major party. Their perception of Trump the candidate is largely based on second-hand sources. As the nominations settle, this is already beginning to change. It will continue to do so. It's a shift I suspect will redound almost exclusively to Trump's benefit.

Surprisingly (to me), Israel receives about as much coverage as Mexico, Canada, or Russia do, and China has consistently received more than any of them.

Sure, proximity might lead one to think Mexico or Canada, both of which border the United States, would be of greater interest to readers than Israel would be. Similarly, population could lead one to assume Russia (18x as many people as Israel), Mexico (15x), Canada (4x) or China (170x) would dwarf Israel in coverage. But Israel isn't everywhere. It obviously punches above its weight but it doesn't dominate.

Riffing off of Steve, who highlights the explosion in the terms "sexism", "racism", and "transgender" in or around 2010, here are three more terms whose usages have shot up in the Carlos Slim-era:

Thursday, May 12, 2016

In that slur stream Savage does not, however, refer to the Republican base as idiots or morons or anything else insinuating low IQ. He deserves credit for that because grassroots GOPers are, on average, more intelligent than sexual deviants.

Since 2008 the GSS has asked explicitly about sexual orientation. The mean wordsum score among gays, lesbians, and bisexuals is 6.25 (n = 173). Among those who identify as "strong Republican", it is 6.52 (n = 490). That's a little less than one-fifth of a standard deviation advantage--about 2.3 IQ points--for the GOP base over the sexually debased. It's a modest difference but still one that would be fun to hit the dismissive degenerate with.

Savage, who is raising another man's child, is only a little less fecund than the 'community' he putatively speaks for is. They average less than one child each. These same Republicans, in contrast, average 2.17.

We have the power to make the future ours. People like Savage are terrified that we're starting to realize it.

Additionally, these poll samples are based on turnout in previous presidential cycles [edit: They are based on adult population as determined by "recent Census or American Community Survey data"]. The general election in November will be less black and more working-class white than either 2008 or 2012 were, and so also less black and more working-class than these polls assume. Both of these things will benefit Trump.

Those who think this is in the bag for Hillary--we're looking at you, Nate--should reconsider, less they find themselves without a shred of credibility left when they sit down for Thanksgiving dinner.

Sunday, May 08, 2016

The Trump phenomenon has basically taken over here. It's quite fascinating. In anticipation of a lull in quantitative material related to the presidential campaign over the next couple of months, here are a few general thoughts:

- In the debates Trump will be playing with house money.

Primary turnout has been record-setting on the Republican side. Even so, much less than half the people who will end up voting for Trump in November will have voted in a primary or caucus. On the Democrat side, where turnout has been depressed everywhere, primary participants will comprise less than one-third of the general election votes received.

Most general election voters are not engaged in nomination processes of either major party. Their perception of Trump the candidate is largely based on second-hand sources, and many of them probably expect him to look like this throughout the duration of the debates. At worst, he'll come out in as good of shape as he goes into a debate in.

With a little prep work and his effortless knack for maintaining frame control, he could turn these things into two hour exposes on Hillary's rape enabling, lying, corruption, assisting homicide, destroying Europe, etc. Whenever she launches into her stock response to accusation X, Trump jumps to accusation Y. The material he has to work with is endless. It will exhaust her. And as Trump well knows, she's vulnerable to this kind of exhaustion.

Hillary, in contrast, is a known political entity. Her objective will merely be to survive the debates.

- My brother casually described himself as a Trump Republican the other day when an acquaintance asked about his political views.

He nailed it. Branding is important. That description is perfectly elegant. It's unapologetic without coming off as unnecessarily antagonistic towards Republicans whose top choice wasn't Trump. It gels well with the phrase it will be most frequently compared to.

- Trump has the potential to win the white vote even more overwhelmingly than Reagan did in '84.

Hillary's top two policy priorities are about as unpopular with working- and middle-class whites as any two could be: Gun control and amnesty.

To make this a reality, the following suggestions: Jim Webb, Jeff Sessions, or Kris Kobach as VP, a cabinet or department head position offered to Sanders, and of course continuing to vigorously stir the pot of Sanders supporters' frustration with Clintonian inevitability:

No sobriquet for Sanders, nor should there be.

- There is more egg for the pundits' faces yet. Nate Silver, who has botched the entire Republican presidential nomination process from the beginning, still can't help himself, asserting that Trump will be a probable loser in November.

Technically speaking, that's true, but Silver doesn't provide much relevant context. The markets have Trump's odds at a little better than 1:2, or about what the Broncos' were going into Super Bowl 50. A Trump triumph should be, by this calculation, about as surprising as Denver's was, which is to say not at all shocking.

Silver is an augur whose divination is determined by Big Data entrails. His readings have regularly been off the mark over the last several months.

That's bad, but at least he should be trying. When it comes to generally perspicacious people for whom this is not an area of focus, the sloppy prognostications amount to silly unforced errors. Here's Razib Khan embracing ignorance and then, well, offering it. Just ahead of New Hampshire, he wrote:

Since I don’t like to spend time on useless things, I’ve been following the primary race very superficially (sometimes to the extent of asking my labmate every few days what’s going on). But I’d say go long on Rubio. Those following closely freak out too much over debates.

Rubio ended up managing just Puerto Rico, Minnesota, and Washington DC before dropping out a month later.

Razib is a polymath. He has a higher IQ than I do. But there are things he is ignorant of. Primary voters weren't going to bail on Trump or Cruz in favor of Mr. Amnesty. That was clear.

Better to understand that late than never, I guess. Tribalism is only going to get stronger.

Silver also wrote that the GOP was weaker than he thought.

Republican favorability has been on the steady decline over the last couple of decades. It enjoyed a little jump from 34% to 37% between July and October of last year, an uptick that is, to the extent it is real, is probably due to the Trump phenomenon.

Finally, he chided the media for giving Trump too much free publicity.

Having spent his adult life as a high-profile New York celebrity, Trump knows how to play the game. Any of the other candidates could've conceivably received a similar amount of coverage--but that would require being as persistently entertaining and exciting as Trump is. It is hardly the media's fault that Trump has the personality traits and news-making savvy that he does.

One of the funnier exchanges in the primaries took place between Cruz and Anderson Cooper:

I'll add that "endorsement" is a no-show also a no-show in Silver's piece. He put enormous influence on political endorsements. 538 maintained an endorsement primary that initially had ¡Jabe! on top of the Republican field. Then after he dropped out after failing to catch fire the endorsements moved to Rubio. After Rubio crashed and burned they moved to Cruz. Finally, after Trump dispatched Cruz, they... well, as of May 6 the only man left standing is still way behind in the endorsement count. Not only is Trump trailing Rubio and Cruz, he's even losing to Kasich.

Thursday, May 05, 2016

It feels like I must have glossed over it before, but flipping through the annotations in Ann Coulter's ¡Adios America! I'm not finding any references to it. I figure that if I'd find it anywhere, it'd be there.

The seemingly obvious thought just occurred to me that if the number of illegal immigrants in the US is significantly underestimated by the Census' Current Population Survey, to the tune of several million--with some estimates asserting that it is underestimated by nearly 20 million people--then the purchasing power parity (PPP) figures for United States will be correspondingly overstated.

Per capita purchasing power parity--a measure of monetary standard-of-living that is designed to allow for comparisons to be made between different countries--is calculated by dividing GDP as measured in purchasing power parity by population size. The CIA factbook puts US PPP at $56,300 for 2015. If there are 20 million unaccounted for illegals here, however, that figure drops to $52,640.

There is, then, an obvious incentive for the federal government to low-ball estimates for the number of illegal immigrants--and unaccounted for people more generally--in the country to make income and purchasing power statistics look better than they actually are.

Tuesday, May 03, 2016

I'm probably using the adjective "presidential" for the first time in my life here but Trump earned the descriptor today if ever he has up to this point.

Cruz appeared to snap this morning. It looked as though he was on the verge of a full blown mental breakdown. He seemed unhinged as he savaged Trump.

The conventional media perception of Trump is that he can't take what he dishes out. When the invective is directed at him, he loses it.

This is, parenthetically, far more myth than reality. You don't climb to the top of the byzantine world of Manhattan real estate by being a lose cannon with a short fuse who nobody likes. But it is a broadly held perception nonetheless.

Well, Trump blew that narrative apart in his victory speech tonight. He praised Cruz and his "beautiful" family on multiple occasions and also spoke of Cruz's great future:

Sunday, May 01, 2016

And the top seven (Trends' display number, not mine) states by search index share:

The political and punditry classes are becoming aware of a new game-changing cultural force that is shifting the intellectual landscape under their feet. As Trump smashes one PC taboo after another, he primes the public to genuinely consider what the Alt-Right is producing with less anxiety and apprehension than before. Once they're receptive, getting the scales to fall from their eyes is relatively easy.

Parenthetically, I like "Alt-Right" as an umbrella label for the various movements--HBD, neoreaction, paleoconservatism, white advocacy, men's rights, identarianism, etc--it is comprised of. In parsimoniously present a contrast both with cucky Conservatism, Inc and the CultMarx left which in many ways have more in common with one another than either does with the Alt-Right.

It's probably counterproductive to quibble with the semantics at this point, anyway. The name appears to have stuck so let's own it.